I am a Tax Partner in WithumSmith+Brown’s National Tax Service Group and the founding father of the firm's Aspen, Colorado office. I am a CPA licensed in Colorado and New Jersey, and hold a Masters in Taxation from the University of Denver. My specialty is corporate and partnership taxation, with an emphasis on complex mergers and acquisitions structuring. In the past year, I co-authored CCH's "CCH Expert Treatise Library: Corporations Filing Consolidated Returns," was awarded the Tax Adviser's "Best Article Award" for a piece titled "S Corporation Shareholder Compensation: How Much is Enough?" and was named to the CPA Practice Advisor's "40 Under 40."

In my free time, I enjoy driving around in a van with my dog Maci, solving mysteries. I have been known to finish the New York Times Sunday crossword puzzle in less than 7 minutes, only to go back and do it again using only synonyms. I invented wool, but am so modest I allow sheep to take the credit. Dabbling in the culinary arts, I have won every Chili Cook-Off I ever entered, and several I haven’t. Lastly, and perhaps most notably, I once sang the national anthem at a World Series baseball game, though I was not in the vicinity of the microphone at the time.

He was regarded as a can’t-miss prospect when he was selected with the first overall pick in the 1999 draft by the Tampa Bay Devil Rays, but by 2004, Hamilton had developed a substance abuse problem, failed a string of drug tests, and washed out of baseball entirely. His career thought over, Hamilton found religion and kicked the drugs and booze (minus the occasional high-profile dalliance) before resurfacing with the Cincinnati Reds in 2007. One year later, he was traded to the Texas Rangers, and in 2010, Hamilton would lead the team to the World Series, winning the A.L. MVP along the way.

The next year, Hamilton and the Rangers were back in the World Series, this time coming within one strike on two separate occasions from winning the world championship. You would think playing such an integral role in the most successful era of Rangers baseball would earn Hamilton unwavering support from his home fans, but in his final at-bat of the 2012 season — which came towards the tail end of the Rangers surprising loss to the Baltimore Orioles in a one-game Wild Card playoff — Hamilton was roundly booed by the Texas fans.

After reaching free agency this winter, Hamilton did what we’ve all come to expect from him, which was to do what exactly nobody expected of him; in this case, leaving Texas and signing with the Rangers’ hated rival, the L.A. Angels of Anaheim.

And upon signing with the Angels, even Hamilton’s contract exhibited his trademark contradiction; while the 5-year, $125 million package would appear to be the end result of a man who was concerned only with getting top dollar, regardless of where it led him, Hamilton graciously included a clause in his deal that requires the Angels to contribute $2,000,000 to the charity of Hamilton’s choice.

While admirable, Hamilton’s philanthropy begs two questions:

1. Will Hamilton be taxed on the $2,000,000 that the Angels will contribute to charity on his behalf?

2. Who gets the charitable contribution deduction, Hamilton or the Angels?

Assignment of Income Principles

Despite the fact that the earmarked portion of Hamilton’s contract will go directly from his employer to a charity of his choice, he will not escape taxation on the $2 million. Why not? It all comes back to the “assignment of income principle,” a tenant of tax law that’s existed since 1930, or roughly the time Jamie Moyer made his big-league debut.

The assignment of income can best be explained with an example:

Like most CPAs, I’m paid a pauper’s wage. Lucky for me, my wife is an elementary school teacher. That’s where the big money’s at.

Sure, wrestling with ever-shortening nap times, an exhausting nine consecutive months of employment, and the life-altering decision of whether to give little Jimmy an alligator or kangaroo in spelling makes her life a stressful one, but when she kicks back after a long six-hour day by puffing on a Cuban lit with a crisp $100 bill, the spoils make it all worthwhile.

Then there’s my son. Kid’s never worked a day in his life, and he seems content to live off his mother’s riches. Sure, some may argue, “He’s only three-and-a-half,” but if you can put a minimum age on accountability, you’re a more tolerant parent than I am.

With my son’s laziness, however, comes the benefit of a low tax bracket. So the wife and I have been toying with the idea of having the school pay a portion of her salary to the boy, subjecting some of her considerable income to his favorable tax rate. Will it work?

The answer, obviously, is no, and its no because of the assignment of income doctrine.

Established some 80 years ago in the landmark decision in Lucas v. Earl, this judicial doctrine provides that taxpayers may not shift their tax liability by merely assigning income that the taxpayer earned to someone else. Specific to an assignment of income to a charitable organization, an inclusion in the employee’s income of the donated amount is required by Treas. Reg. 1.61-2(c), which provides:

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